by Trevor Sykes
One of the strongest arguments against investing in gold was that the metal yielded no interest while you were holding it so it stands to reason that the environment of low interest rates should be friendly for investors in precious metals.
That argument, while valid, has lost significant merit, because investors don’t get much of an interest rate holding government bonds or bank deposits. Indeed in several countries interest rates have gone negative, which means that investors are paying governments for the privilege of holding their bonds.
It’s worth noting that gold has been a better investment in $A than $US. Gold climbed to $US1883 in August 2011, dropped to $US1061 last December and has since rallied to about $US1200.